Global Food Giants Make a Killing As Ukraine War Fuels Shortage
Image Courtesy: NDTV
James Cargill, Austen Cargill and Marianne Liebmann of the super-rich Cargill family in the United States (US) have joined the Bloomberg Billionaires list of the richest 500 people alive due to the rising food prices and turbulent global commodities markets caused by the Ukraine war.
Thanks to their majority stakes in Minnesota-based food processor Cargill Inc—one of the world’s largest food companies—each of the siblings has an estimated $5.4 billion fortune, up 20% this year, Bloomberg reported. Other Cargills who are already among the Top 500 include Pauline Keinath, a great-granddaughter of founder William Wallace Cargill, and Gwendolyn Sontheim Meyer with fortunes of $7.8 billion each.
More than 20 members of the extended Cargill-MacMillan families, including Alexandra Daitch, Sarah MacMillan and Lucy Stitzer—control 87% of the closely held company, founded with a single grain warehouse in Conover, Iowa, in 1865. The Cargills, ranked 11th on Bloomberg’s September 2021 list of the world’s wealthiest families, had a collective fortune of $51 billion last year.
According to The Guardian, Cargill employs more than 155,000 staff in 70 countries and is expected to break its 2021’s record-breaking $5 billion profit. Cargill reported the biggest jump in profit in its history with a 63% increase to almost $4.93 billion with revenues rising by 17% to $134 billion.
The UN this month warned that global food prices had soared to a record high because of Ukraine war. The UN’s Food and Agricultural Organization (FAO) said its food price index had risen by 12.6% in March compared with February, “making a giant leap to a new highest level since its inception in 1990”.
The Ukraine war has “spread shockwaves” through the already-destabilised global food and commodity markets with the United Nations (UN) World Food Price Index for March reaching a record high. According to the Food and Agriculture Organization, the prices of cereals, vegetable oils and meat are at an all-time high. For example, the war has severely impacted the export of crucial commodities from a region that produces more than 25% of the world’s wheat exports.
The closure of ports in Ukraine has stopped the export of wheat and exports, pushing cereal prices up 17% over the past month. Global wheat prices soared by 19.7% in March and maize prices posted a 19.1% month-on-month jump. Russian exports have also been affected due to financial and shipping problems.
Food giants, including Cargill, have in turn benefited from the war with the valuation of Illinois-based Archer-Daniels-Midland Co. jumping more than 25% since the Ukraine war. Food prices were already rising before Ukraine war started in February. Cargill’s chief executive David MacLennan had said that he expected them to be high throughout the year.
The increasing wealth of the Cargill family is “a depressing indictment of our current economic model—one which has enabled a tiny minority to grow ever richer despite the longest freeze of living standards in the modern era and a cost of living crisis which is threatening to impoverish millions”, Andrew Speke of the High Pay Centre think tank, which campaigns for a fairer society, told The Guardian. “Now, more than ever, it is essential that governments take serious action to redistribute wealth from the super-rich to those on low and middle incomes.”
Eric Muňoz, Oxfam America’s senior policy adviser for agriculture, called for “urgent action to save lives now and to address the inequality, broken food system and other root causes that are driving this crisis”.
“Right now, we’re seeing food prices skyrocket, which is taking a devastating toll on the most vulnerable communities. Exorbitant food prices, alongside the COVID-19 pandemic, are pushing families in countries like Ethiopia, Somalia, Kenya and South Sudan to the breaking point. Meanwhile, the richest have seen their profits soar,” he told The Guardian.
According to Gemma McGough, a British entrepreneur and a founding member of Patriotic Millionaires UK—a group campaigning for the introduction of a wealth tax on the world’s richest people to help close the inequality gap—the Cargill family’s soaring wealth is yet another example of “the grotesque failure of our global economy”.
“We are in a state of multiple crises, and governments cannot continue to stand by while hunger and food poverty increase and the wealth of a select few soars. It is essential that we rebalance our economies, taxing the wealth of people like me, and invest in systems that can support the millions of families currently unable to feed their children,” McGough told The Guardian.
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